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Fans are at the heart of the Creator economy, but how do you turn your audience into a community to ensure long-term success? and what role can crypto play? Join us for a Twitter Space fireside chat with Passion Economy pioneer, Li Jin. Recorded live at Community Camp on July 2nd, 2021.
Fans are at the heart of the Creator economy, but how do you turn your audience into a community to ensure long-term success? and what role can crypto play? We dive in to these topics with Passion Economy pioneer, Li Jin.
Patrick Woods (00:00): I'm super excited to welcome Li Jin to the stage for this final session. Li is a good friend of ours. She's the founder and investor at Atelier Ventures, prior to that she was an a16z. And she is a thought leader in all thing's community crypto in the creator economy. So, super excited to dive in on some pretty interesting questions today. I'm joined by Rosie Sherry, who is one of my favorite community builders in the world. She's Community Lead at Orbit, and also has been creating great community content for the past many years.
Patrick Woods (00:34): And I'm Patrick, I'm the CEO and co-founder of Orbit. So, thanks, everybody. Thanks, everybody for joining today and following along. Maybe Li, if you would mind starting off by setting some context, love to get just set the context of the room. Who are you? What do you focus on at Atelier? And what's the overlap between your investing interest and your personal interests?
Li Jin (00:59): Oh, interesting. Thank you for having me. It's an honor. It's always a pleasure to talk to you. Yeah. So, I am a full-time investor, started my fund at Atelier last summer. I'm investing in the future of work, especially internet enabled work, and especially creative work. I call this the passion economy. And I have been doing this fund for a little, just actually a little under a year. And before this, as mentioned, I was at Andreessen Horowitz.
Li Jin (01:31): And in terms of how my investing interests intersect with my personal interests, I think they're basically one and the same. Because I don't really separate the two. I would say, at a high level, I'm really interested in social issues, political issues. I'm very interested in inequality in the world and creating more paths for upward mobility. And I think that obviously intersects with my investment themes around the future of work and platforms that people can use to earn income. But it also intersects a lot now with crypto and the creator economy.
Li Jin (02:08): And the notion of bringing people together and allowing them to share in the value that they create together. Yeah. So, that's a bit about me, some of my investments that you might have heard of, include companies like Patreon and Substack, and Stir, there's a bunch of others. And I would also say, I feel like I'm not the expert in this room on this topic. I think Patrick, you know a lot more about community than I do. The other Patrick who I see here, he's like my go-to person about crypto and the creator economy. So, I feel like we should invite Patrick up on stage too.
Patrick Woods (02:48): Cool. Scrolling and trying to find-
Li Jin (02:52): Patrick, raise your hand. We can make this a very Patrick dominated panel.
Patrick Woods (02:58): More Patricks, the merrier. Yeah. Let's get some hands raises. And before we do that, I think we're probably underselling yourself a little bit here. Because what I found is that the level of knowledge and awareness out there in the world about this overlap between crypto and community, and these new emerging concepts like NFT and DAOs. I've never heard of these acronyms. So, I think you probably have a lot more perspective on this than most folks.
Patrick Woods (03:24): So, maybe, would you mind talking a little bit, just at least from your perspective, about the overlap between community and crypto? And it can be very high level, but we have a lot of community builders in the room. And this is probably the first time they're like dipping their toe in the water on these concepts. So, we'd love to hear from you first on how you see the confluence of community crypto and your journey from future work to creator economy, and now to crypto, and that progression, what you're seeing, we just love to get your perspective.
Li Jin (03:53): Sure. Yeah. So, I think crypto obviously, is like so all encompassing. It's like the internet. There's so many different facets of it. And I like to use the analogy of like a giant building with a lot of things inside of the building. And depending on which door you open, there's like a different element of crypto that you see. And so, as it pertains to online communities, I think there's a lot of intersection there, because crypto essentially gives the tools for people to be able to coordinate and work together in potentially low trust environments.
Li Jin (04:32): And right now, I think there's been a lot of conversations about DAOs, which are decentralized autonomous organizations. It's really hard to pin down the definition of a DAO and depending on who you ask, you'll get a different definition. But I think of them as like online organizations or online communities that share, importantly share a bank account and share the concept of ownership in the sense that all of the members of the DAO have governance rights and also have economic upside in the organization.
Li Jin (05:07): So, I think of it as like a community plus, traditionally, communities have been defined as a group of people that share a mutual concern for each other. In other words, they're there because they care about each other. They might have a similar mission or shared vision and values as each other. But there hasn't really been an economic bond between them. And DAOs layer in that shared economic bond and shared ownership, and gives everyone this piece of economic ownership in the DAO that I think is really powerful and can help to advance its goals.
Patrick Woods (05:41): Yeah. That's really fascinating. So, you, yourself have been personally involved with NFTs in particular. In fact, I think you sold maybe it was your first NFT a few months ago, it was featured in The New York Times piece, what are you paying for when you buy a gift for $25,000?
Li Jin (05:57): Yes.
Patrick Woods (05:57): Lucky to hear your experience with that, because that seems pretty specific to the creator economy. And you can talk a little bit about what that was all about, just like tactically what that was. And then, we can explore some of the second order effects that we experienced. But what does it mean to sell a gift as an NFT?
Li Jin (06:17): Sure. So, a few months ago, I sold an NFT on a platform called Foundation. The NFT was an animated piece of art that was related to my blog post that I published in December called Building the Middle Class of the Creator Economy. So, I published this blog post related to the idea of how do we cultivate a more vibrant creator economy online in which there's possibility for many more people to succeed versus the power law that we're seeing online in various greater platforms.
Li Jin (06:50): And so, that was the artwork that I mended and sold. And after a heated 24-hour auction, the final sale price was like 13.37 ETH, which at the time was $25,000. It went up to $50,000 now. I don't even know what the price would be now, but that's what it sold for. And the reason why I did this was because I am the person who learns by doing. And at the time, there was a lot of discussion about NFTs and excitement around how they could represent this new monetization model for online creators.
Li Jin (07:32): And specifically, they represented a new way of being able to monetize digital ownership of a piece of media, because NFTs introduced the concept of scarcity. Before, it had been the case that if you were creator online and you put out a piece of media, whether it be a photo, or a video, or an essay, or whatever it was, everyone could replicate that. Everyone could have a copy of that. Everyone could consume that. There was no concept of scarcity. It could be replicated for zero marginal costs and no one really own that.
Li Jin (08:09): NFTs, the metadata of the provenance and who owns this piece of media lives on chain. And so, introduces the concept of scarcity. And turns out, people like to own things, people like to feel that they have ownership over something scarce. And so, NFTs introduced this new dynamic of scarcity, which a lot of people are willing to pay a lot for. And so, in the past few months, we've seen a lot of NFT sales go for a lot of money.
Li Jin (08:40): And I think that's an expression of super fandom as it relates to the creator economy, where I've previously written about the concept of 100 true fans where as a creator, as an online creator, you actually don't need that many fans in order to sustain a living and to make a decent living. If you're able to offer a lot of value and everyone pays you to the order of like $1,000 a year, then you only need 100 true fans. Kevin Kelly has written this seminal post about 1,000 True Fans where he talks about how, as an internet creator, you don't need millions of fans, you only need 1,000 fans.
Li Jin (09:19): Because if you have 1,000 fans paying you, I think like $10 a month, then you can make a really decent income. I think NFTs stretch that even further to being able to sustain yourself off of one true fan. Or maybe it's like two true fans because you need to have like a bidding war in an auction that gets heated. But like NFTs capitalize on that very small subset of super fans that you might have that are really price insensitive and willing to pay a lot for this very special item online.
Patrick Woods (09:51): That's awesome. So, I think it's been like three months since that happened, three or four months. What have you able to learn since then about the NFTs and their role in the greater economy? Are you more excited after going through that experience? Are you jaded by it? How did that experience really inform your view on like NFTs and creators in general?
Li Jin (10:15): Oh, I definitely became way more excited about it after this experience. And I think I went into it much in the same way that I think a lot of the press coverage around NFTs has been around that direction of like, "Wow, people are making a lot of money. Artists are making money online. This is like awesome. And this represents like a new creative revenue stream." And after I did the sale, I had just so many realizations that made me more excited about NFTs.
Li Jin (10:47): One was the fact that I realized that selling an NFT is this really powerful way to build relationships, like multiple of the bidders that I met through the process of selling the NFT are people that I still talk to on a daily basis. And I didn't know them before the sale. I didn't really talk to them before the sale. And through this experience, they reached out to me. They were like, I got multiple messages from people saying like, "I bid on your NFT because I've been your fan for a really long time and I want an excuse to talk to you. I wanted to just to have a reason to open up the conversation with you."
Li Jin (11:28): And that blew my mind. I think Patrick has written about the concept of a non-fungible like. And I think bidding on an NFT is a non-fungible like. On social media today, all likes are fungible, like your like is the same like that's my like, and it's all accounts is like one incremental like. But when you are bidding on chain and all of the auction history appears in the history of the piece, that's a very non fungible expression of a like from someone specific. And so, it was just really powerful for me to see all of the people bidding on the piece, I formed relationships with them.
Li Jin (12:08): I'm friends with them. I invested in one of their companies. And we've just stayed in touch. So, I thought it was a really... for a creative person online, I think having someone bid on your NFT is just such an expression of friendship and affinity. And that part was really special to me. As a creator, I haven't really had that feeling through any other medium before. Yeah. Go ahead. Oh, I was just going to continue on and say like, and what excites me about NFTs going forward is that element of what else could they be used for?
Li Jin (12:42): So, in my experience, it was obviously, a sale of one piece of art. But there was also this hidden use case for me of relationship building. And I think that's where NFTs are also, a lot of the more recent projects are trending, where the NFT represents access or entry into a community of minded people who share a similar mission or set of values. It's like a reason to get together and to form a community. And so, right now, we're seeing a lot of like auditioned NFTs or like NFTs where there's a set of 1,000 or 10,000 of them.
Li Jin (13:21): And they represent your key into a community online. And there's a whole ecosystem of experiences that are being built around being an NFT holder in that community.
Patrick Woods (13:35): Okay. So, that's really interesting. So, one quick comment, it reminds me of some of Rosie's work around early stage community building. And she talks a lot about when you're building community in the early phases. As the builder, it's great to be the person's first like or their first subscribe, and actually be on the ground and interacting at the early stage. It sounds like when you're describing it with your experiences like exactly that, like the people that jumped out and supported you early on. It was like a de facto community as a result of it. It's really fascinating.
Li Jin (14:05): Totally. I would love to hear Patrick Rivera's thoughts about what he's excited about with regards to NFTs.
Patrick Woods (14:12): Yeah. So, Patrick, welcome to the stage, would you mind giving it a quick bio, and then talking to us a little bit about your view on NFT. And then, any specific overlap with that part of the world and community building. It'd be great to get your perspective.
Patrick Rivera (14:26): Yeah, definitely. Thanks for inviting, Li, in. Yeah. I'm super excited about this. I am hopping on a flight in like five minutes. And so, I can just give a quick overview. And then, yeah, I'll hop after that. But I appreciate you guys having me. So, yeah. I'm currently working at a crypto protocol called Mirror. And we build tools to help creators and communities monetize and build relationships with their community into a few different tools we built, one is tokenized crowdfunding, where we've had people raise money for novels, newsletters, film projects, and they get their contributors a token.
Patrick Rivera (15:01): And then, with that token, they can get access to a Discord server, they can give them exclusive rewards. And like Li said, they build deep relationships with these people. And then, also stuff that we're doing is around what Li mentioned with NFT additions. I mean, that's the next big wave. And Li talked about how this first wave in the past few months has been around, these one of one NFTs where it allows you to monetize your super fans, the people that are willing to pay $1,000, $10,000, $50,000 to have this one unique digital artifact.
Patrick Rivera (15:32): But I think the next wave is going to be around more these community based NFTs where like we mentioned, there's the CryptoPunks as an example, where there's these 10,000 pieces that are subtly unique. But by having one of these pieces, it allows you to get access to different communities, exclusive rewards. And it just signals to other people in the community that you bought this digital artifact, and you're part of this community. And that's the next wave.
Patrick Rivera (15:57): Then even after that, like further out probably a couple of years from now, I think it will be where there'll be crypto native social apps, where all the content that's generated on these crypto native social apps are going to be NFTs. And the creators are going to own them. They're going to see exactly as using them. They're going to be able to license them, earn royalties off of them, and compose them with a lot of defying financial protocols. And be able to monetize their content in completely new ways. And so, that's why I'm really excited about it, the intersection of creators and communities.
Patrick Woods (16:27): Super cool. So, this is like a really tactical question. But it's something that I've heard has come up in conversations with some folks actually, just yesterday at our conference, like we've heard... I feel like such a noob here, like we've heard rumors of something happening in a far-off land. There's examples that we've heard of using NFTs or tokens as access to parts of a community.
Patrick Woods (16:49): So, I think tactically that could mean holders of a token would have access to a Discord. And then, there's a bot that checks if on a periodic basis, whether the people that you're still holding that token and revokes, or access to the community, whether that token is gone. Did I characterize that correctly? Have you seen that happen? I just love to hear a tactical breakdown of what that workflow looks like.
Patrick Rivera (17:12): Yes. Right now, there's... yeah. Li, were you going to say something?
Li Jin (17:15): Go ahead. No. I was just going to say the same thing you were. So, go on.
Patrick Rivera (17:19): Yeah, yeah. It said, right now, the V1 is basically building these tools on top of existing community products, like Discord that's the main one, Telegram as well. And there's tools like CollabLand where, yeah, it'll basically send you to their landing page. And then, it will check your wallet to see if you hold these tokens in a certain amount. And then, they'll give you access to certain channels based off of that, and so that'd be one.
Patrick Rivera (17:45): But I'm seeing people talk about V2 version, where there are these specific messaging protocols that are these decentralized protocols. And they natively integrate with Ethereum. They're built from the ground up with the assumptions that, okay, we don't know anything about you. You're just an address on the Ethereum network, and being able to build experiences native to that. And so, yes, those are still a bit like afar off, probably years away, like one to three years away.
Patrick Rivera (18:09): But I think we'll end up seeing these products where you don't connect with your email, you don't connect with OAuth. You simply are an account in crypto land and based off of your holdings. Then you're getting access to different products, different services, just completely through crypto native means.
Patrick Woods (18:31): Very cool. So, for those that have just jumped in, this was a conversation as part of Community Camp, a week-long event we've been hosting here at Orbit. You can learn more at communitycamp.com if you have questions you want to hang out with the conversation that we have, a Discord going, no token required discord.orbit.love. There's a channel specifically for this conversation. Feel free to drop into some notes or questions there along the way. Then Patrick, I know you got to jump on a flight soon.
Patrick Woods (18:54): I appreciate you jumping in and having the conversation for the folks in the room like myself who are new to this world and Li, this is a question for you too. But are there some resources you would point people to that are interested in exploring this topic more? We'll grab those resources. We'll put them in the Discord as well. But if there's one or two, or three resources that you think are must reads for understanding the depth behind this conversation we're having today, I'd love for you to share those. And we'll find them and drop them in the chat.
Li Jin (19:23): Yeah. For sure. I think a problem that plagues the space is things are moving so quickly. And so, there's not a lot of writing and documentation around it. And so, I think the best way to learn and to get involved is just to do it, to join these tokenized Discord communities, to buy some of these tokens get access, use CollabLand, use Discord, meant an NFT, sell an NFT. That's really the motion that I've taken to learn because in my experience, the documentation has been a little bit light because it's moving so quickly.
Patrick Rivera (19:58): Yeah, 100%. One specific one that's really popular is friends with benefits. And so, if you go to fwb.help, you can go there and they'll get you set up. And also, a16z has a really helpful NFT cannon. They've 50 different articles. But at the end of the day, the best way is just to mint your own NFT, get involved, hang out on Twitter, and yeah, just get your hands dirty any way you can. I'm going to hop on the flight in a few minutes inside. Thanks for having me though.
Patrick Woods (20:28): Yeah. Thank you.
Patrick Rivera (20:29): Bye, everyone.
Patrick Woods (20:32): All right. So, I have a question for you that maybe feels a little more philosophical. But Patrick was just talking about the RAD innovations around communities where people are represented by an address on a blockchain maybe a little more. What do you think that means for communities? Because when we think of communities today, people we know each other, we meet up in person, what does it say about community that we're moving towards the thing, the environment where it's no trust, everything's a blockchain?
Patrick Woods (21:00): How do we think about community in that context? And that's maybe a malformed question, but hopefully, there's enough there for you to dig into.
Li Jin (21:06): Yeah. So, I think for a while, I think people were of the belief that you could only create really sticky social products and really vibrant communities if everyone went by their real name and had their real identity attached to their profiles. Like initially social networking, Ondato, allowed people to set their own usernames, to be anonymous, to be pseudonymous, and to change those usernames as often as they wanted, et cetera. And then, I think the last 10 years of social networking has been dominated.
Li Jin (21:39): And social networking and community building online has been dominated by the prevalence of real names. And I think that's definitely a probable shift that happened. I think it came with a lot of implications with how people used online services and products. And now, I think we're moving back in the direction of enabling people to take on whichever identity they want to. And so, when Patrick's talking about just being a wallet address and just authenticating through your wallet, I think it is harkening back to the early internet days when we didn't have to be so tied to our real-world selves.
Li Jin (22:20): And we could be anyone that we wanted to online. And you can create different wallet addresses for different facets of your identity. Maybe one is like your public wallet that you show off with all of your NFTs in it. Another one is your investing account with all of the different tokens that you're trading, and you want to keep that private. People I think are now exploring and experimenting what does it mean to have an identity online?
Li Jin (22:52): And what are all of the identities that I could potentially show to different communities? Because I think like humans are very rich and multifaceted. But the current way that identity works online flattens it to this one person, one profile, like our real names. And so, I think having pseudonyms online could actually be quite freeing. And then, enable people to be different versions of themselves in different communities with different people, which I think more accurately reflects how we actually behave as human beings.
Li Jin (23:24): We're different people. We behave differently around our co-workers versus our close friends, versus our parents, versus our friends from high school, versus our friends from college. So, I think we're trending in that direction online as well.
Patrick Woods (23:38): So, I'm curious to get Rosie's thoughts on this stuff. She's going to be annoyed at me for calling her out. But how's this tracking, Rosie? What do you think about the stuff we're talking about so far with regard to NFTs and the rolling community, and all that good stuff?
Rosie Sherry (23:54): Hello. Yeah. I mean, I guess, I have a lot of thoughts around it. But I'm also conscious that I'm a noob as well. I'm a bit of a skeptic. And I think I've not really like had the headspace to... or I guess spend the time as you say. If you want to learn about it, the best way to do it is, go and do it. And that to me, brings struggles as well. Okay. And then, I think there's a lot of things that I like about crypto that is like getting people to come and talk about like rewards in communities.
Rosie Sherry (24:37): I think traditionally in community, we've been very bad or there's been no way at properly rewarding people within a community. And so, I like hearing the discussions that crypto brings up around ownership and tokens, and all of that. To me, in theory, it sounds nice. But I wonder, in practice, I feel like it could turn into a nightmare. Is that yes in theory? It's nice that people can own a part of the community. But what does that mean in practice and what will actually happen as a result of that?
Rosie Sherry (25:15): And if people are like putting their hearts and souls into something, a vision that they might have. And then, it can potentially be like, I wouldn't say taken away, but other people could come in and you just don't know who they are. Especially like when there's lack of identity. And I think probably lack of trust. I guess, these are the things that I'm thinking about, is like one community so often based on trust and relationship building. I guess I struggled to get my head around longer term, what would this look like?
Rosie Sherry (25:53): And I guess, in my head, I'm thinking like, "Can we take some of the ideas that cryptos bring in?" But bring them back to the existing world, like rewarding people better in communities. We should get better to that naturally. We should pay people. We should find ways to give them ownership of some kind, and find ways to make them feel like they really have a stake in something. And at the moment, that's hard in business, but I think it's possible.
Rosie Sherry (26:26): And there are companies out there doing self-organization within as a business and profit sharing, and ownership sharing, all of that. There are real world examples of that. And I guess, if there's examples of that, going back to the '70s, '80s, when some of them have start is like, why can't we do that in the real world? I guess, like in a system, I wouldn't say has more trust, but has more accountability. Yeah. So, that's me.
Li Jin (27:03): What do you think the trust in a non-crypto community is based on? If you're in a community with a bunch of different strangers who don't know each other offline, how do people form that trust?
Rosie Sherry (27:20): I would say generally through connection and through like communicating day to day or week by week. It's hard to trust people if you don't have contact with them.
Li Jin (27:34): Yeah. I think that is still true in a community that is like token gated, or NFT gated. I think it actually creates more of a basis of trust because you are all sharing in the same... you're united by the same financial currency. In a similar way to when... I've seen footage of Tesla shareholder meetings, where people just go completely wild, whenever Elon is on the stage. And they feel like they have this common mission and goal, and something that unites them, even if they don't know each other.
Li Jin (28:17): And that's the fact that they're so in love with this company and all our shareholders in the company. And I think that the crypto element added on top of community turbocharges that in that similar way, where everyone is financially aligned and has this economic mission in common with each other.
Rosie Sherry (28:40): I don't disagree with that. But I also think that when money gets involved, things can get ugly as well. And a lot of people will come in who don't have the same beliefs and motivations, and they're there for the wrong reason. And it's that transactional angle that sits uncomfortable with me at the moment. And I'm trying to think about it. So, what does this mean? So, if you start businesses with people, it's common knowledge.
Rosie Sherry (29:15): A lot of businesses failed because of the relationships but also just disagreements with money and disagreements with ownership, and who should own what and how much people should get. And money is a very difficult thing to deal with. And I guess I see cryptos money as well, but I think people, it'll be interesting to see how the future evolves around money and how attitudes change around money as well. It's definitely changed over the years. But definitely people, I think people change when money becomes part of the equation.
Li Jin (29:53): Totally. I think that community building online and also being a creator online has so often historically been thought of as a labor of love, like people shouldn't expect money to be part of the equation because they should just be doing this out of their personal fulfillment. And because they're intrinsically motivated to be doing this thing, like artists shouldn't expect to get paid. They should be doing it because they love it. And same with community builders online, there should be no money in the equation, because it's intrinsically fulfilling.
Li Jin (30:27): And I think that attitude, on one hand, it's very pure and we would all like to think of art and community building that way. But on the other hand, it's also very exclusionary. Because it means that people who need to spend time earning a living and building wealth for themselves, like who don't have the free time to just do something for intrinsic fulfillment. It means they can't participate. And so, I think of like tokenized communities and crypto communities being this really interesting evolution of giving this activity that previously didn't have a business model a new business model. And I think it deserves that. Because it is a type of work.
Rosie Sherry (31:17): Yeah. I don't disagree. But I also think it can just be done normally through the current means, I guess. And I think we could probably learn from each other, like learn how the crypto community are thinking about things and vice versa. And so, I find it fascinating. And I'm conscious that I'm not in the crypto world. So, I feel a bit naive as well. But I've also built communities from scratch. I've also turned them into business. Have had dilemmas about like, do I turn into business, if it's a community and what will people think?
Rosie Sherry (31:55): And how will people react? I do think it's become more normalized that it's okay to make money through community increasingly. And I guess like crypto still... I guess it will take a while. I don't know how long it's become normalized, if it does become normalized. But at the moment, it still feels like a huge mystery. It's hard to get involved. We have to spend the time to do that. And I guess most people don't have that time at the moment.
Li Jin (32:26): By the way, there's someone that we should bring on stage too, Jackson Dame, dame.eth. Jackson is someone that I follow on Twitter to learn what's happening on the coolest corners of the internet. So, yeah, please raise your hand.
Patrick Woods (32:43): Yeah. Raise your hand. If anyone has a question for Li or anyone else, feel free to raise your hand as well. We will try to get to those. We also are in keeping the conversation going on Discord at discord.orbit.love. We're keeping an eye on the chat there as well. So, yeah. So, welcome to the stage, feel free to say howdy.
Jackson Dame (33:02): Hey, everybody. Thanks for having me up here. I'm glad I was able to tune in here. A lot of people, a lot of faces that I recognize. And also, just very passionate about this topic as well. And for those who don't know me, I do a bunch of content community and meme stuff for an Ethereum wallet called Rainbow. I'm new to the crypto space also in the sense I've only been involved probably about nine months now.
Jackson Dame (33:26): So, I'm relatively new. And I'm a "normal person" that got into it. I live in South Carolina, which is the state in the United States that has the least interesting crypto. So, I'm very familiar with all the objections and the nuances to it.
Patrick Woods (33:42): So, great perspective. I'll ask the question that I asked earlier. Maybe you were here or not. But if you had to recommend one resource or guide for a complete new wrapping their head around this stuff, where would you point them to go and read up?
Jackson Dame (33:58): Yeah. Totally. Well, honestly, I mean, I think I would definitely start with the Ethereum Foundation's actual website. They have a lot of really great... I think people might initially think that the Ethereum Foundation has content written towards technical people, but there's actually lots of really great content under the learn section of their site, highly recommend all that stuff. Honestly, I think the Ethereum Foundation has one of the best explainers about DAOs that's out there.
Jackson Dame (34:26): I don't think it's one of the... it's not one of those clickbait articles that people use that gets circulated around, but highly recommend checking that out. Hopefully, here in the coming month or two, we're going to have a lot of content rolling out on Rainbow's that is specifically geared towards helping new people come into the space and understand it from a less like technical heavy perspective.
Patrick Woods (34:50): Yeah. That's awesome. What got you into this space? Why did you make the transition nine months ago?
Jackson Dame (34:56): Yeah. So, honestly, I was been keeping an eye on the crypto space probably since 2017 when the huge Bull Run happened. I didn't get into it because I just didn't see very many people in the space that were like me. And it still, to Rosie's point, I felt intimidated by it. And it seemed like something I couldn't really understand. I'm not really a developer. But over time, I started following more folks that were into it, kept an open mind about it.
Jackson Dame (35:21): And I think like late 2020, I saw a lot of people that I followed online starting to actually, who seemed like people that I could relate to, started getting into it. And my first foray into Ethereum was actually using Rainbow Wallet. And that's definitely why I ended up working here is because that was my first gateway into Ethereum. And I learned to love it through that app, so much so that I wanted to work here. And honestly, the Rainbow really helped me get the sense for how fun and easy and not quite as technical the blockchain and crypto could be.
Jackson Dame (36:01): We still have long ways to go to make it even more user friendly. But I definitely think that companies like Rainbow, companies like open see places that are making things a bit more user friendly, it's happening really rapidly now, whereas it wasn't in the past. So, I feel like we're very prime for more and more folks like me to come in.
Patrick Woods (36:25): Cool. Yeah. Thanks for sharing that perspective. We also just pulled up JO7 up to the stage of the Discord. JO7 says, "I've been building online communities for 20 years now. And I'm a founding member of BitDAO. I would love to share my perspective in the Twitter spaces." So, welcome JO7, tell us about your experience building online communities and why DAO seemed to be the next thing.
JO7 (36:47): Thanks, Patrick. Hey, everybody, thanks for having me in the space. I'm just super excited to hear from all these different perspectives and love that there's conversations happening among and between folks here who are maybe a little bit more crypto native or more recent, or maybe still on the fringes. But it is my belief personally that the spaces are starting to collide more and more. And I appreciate the space, and especially Li Jin as well, as somebody who has a big fan of your VOD pieces as well as the companies that you invest in.
Li Jin (37:23): Thank you.
JO7 (37:23): Joe from Stir is a personal friend of mine, we overlapped that Yik Yak, so definitely appreciate you empowering creators to the companies like his. I would say that, yeah, the qualifier I mentioned earlier as having had 20 years of experience building on my community, hopefully it doesn't date me too much. But I think it really more so hopefully speaks to how early I got in. I still consider myself pretty young. But to be honest, once I plugged in my 288 US robotics modem into the internet, it was over for me.
JO7 (37:53): I was plugged into what I knew was the future. And it allowed me as somebody who is a Korean American to be able to move to the world in a bit more of authentic identity. And so, I do 100% agree with some of the things that Li you were saying about identity. And it's interesting to think about what is identity in our culture these days, especially when one can feel a little bit more authentic under a pseudonym, versus using your real name.
JO7 (38:23): It's something that I think during my time at Yik Yak, we were building a local social network that was purely based on anonymity. There were some interesting theses under that company that we were able to explore. And it was truly incredible, but also downright disheartening sometimes to see the types of communities and tropes that would form when you don't have any identity attached to or name attached to your identity, rather.
JO7 (38:51): But I think just a couple of things that I wanted to add was, plus one to .eth massive fan of Rainbow. I believe that they've truly become one of the few killer apps for me in terms of crypto. Anytime I am "onboarding" any of my normie friends or artists into the space, I just send them the link to Rainbow and I said, "This is the app you need." And in my opinion, they are going to be the on-ramp for the Snapchat generation, right? And actually, have a focus on UX UI.
JO7 (39:25): And they will be I think, hopefully a massive player to come. The second thing about I think, DAOs, and I know that's been a pretty meaty topic in this space, but also just in general, it seems like we're undergoing what's... I don't know. If we had DeFi Summer, it seems like DAO Summer might be the next thing. But I think one thing is that in my experience, DAOs are not a monolith. It's the idea of a DAO at the base, I feel like is about the notion that one plus one equals three.
JO7 (39:57): And that when you have a collective of people who are gathered under the same charter or mission, or even interests, that there could be a larger halo effect. And that's certainly what I've seen with BitDAO. But I do think that there's a spectrum of different types of DAOs. And it will say Koopa Troopa's dive into that, it was fascinating to really formalize some of the language around that.
JO7 (40:25): But I do feel like one thing that I am... I think the question, and I'd love to hear other's perspective on this, is what happens when you introduce financial incentives into a community? I do think there's two sides of the coin here when it comes to DAOs. The bull case or optimistic approach to DAOs is that by financially providing financial ownership and fragmenting and fractalizing that in a sense among different community members. It motivates a sense of ownership and empowers a sense of ownership that necessarily might not have been there.
JO7 (41:06): But I think the other flip of that, or potentially the bear case for that is that it actually introduces incentives and distorts the actual dynamics of a community that would be born out of, let's say, non-financial and non-monetary means. And so, I can see both Rosie side as well as Li side. And I find myself going back and forth on those, and being a part of certain DAOs. I think it's almost an experiment in behavioral organizational studies.
JO7 (41:38): And it's been fascinating to not just observe, but be a part of as well. So, I'll pause there. I love to hear other thoughts on that.
Patrick Woods (41:46): Yeah. And actually, I'm sure we do appreciate you summarizing those perspectives with regard to how financial incentives can impact the community dynamic, but my guess is that, the majority of the folks in this room... and this may be the first time that the idea of a DAO is coming up for them. Could you just like talk a little bit about the basics, the 101 version of what a DAO is and how it works? And then, we can dive into some of the deeper questions after that.
JO7 (42:14): Yes, for sure. And I appreciate you scaling that back a little bit, just to make sure we unpeel that. Again, I think the place I would start is that, in my opinion, all DAOs operate under the notion that the greater collective basically the sum of the parts can equal more than the whole. That one plus one doesn't equal three, but it equals five, 10. That there's a multiplicative or potentially exponential effect that happens when you gather people.
JO7 (42:44): And then, the other I think key tenet there is that ownership is... there is no one person that essentially is the access, the de facto head. But instead that decisions are made as democratic of a way as possible. And that is done through the blockchain. So, there are certain tools. And I think there's maybe even right now there's a bit of a lack of maybe tools, but there are tools that are helping enable this to happen on the blockchain.
JO7 (43:11): And you can see how, with the blockchain being a source of immutability and transparency, and permanence, it allows for decisions to be logged and done in a way that is open. And they say in the crypto space, permissionless. So, I think, yeah, to underscore or underline, double underline the point I'm trying to make is that, DAOs typically are a group of people who are aligned under maybe a specific objective, or even just a direction and are looking to make decisions with each other as opposed to just allowing one person to make the decision. That I hopefully is my sad attempt at trying to pack into what I believe a DAO is.
Patrick Woods (44:01): It's really great. So, let's make it super specific. Let's walk through an example. So, let's say the speakers on the stage here, we decide to form a DAO. Why would we do that? Maybe we want to build a community, and we're going to form a DAO to do that, or security an asset. What would be the step by step process for putting one of these things together, and how that would look tactically?
JO7 (44:25): Sure. I think that's a great prompt. I would say that, let's say that Legion is releasing a new piece of art. And none of us could buy it on ourselves by ourselves. But if we pooled our resources and capital, we'd be able to purchase that art. And I use this as an example because it's what I believe currently a lot of the organic formation of DAOs are under the umbrella of collecting a piece of art. And a lot of them are... and that certainly was the case for BITs style, which is the one I'm a part of as well.
JO7 (45:00): None of us would have been able to purchase that piece of art as a series of 26, I believe. None of us would have been able to purchase one of those on our own. But if we were to pull all our capital together, the thought was maybe we can buy one, maybe we can buy two if we're lucky. So, there's the shared capital aspect of it. You're essentially sharing a cap table or bank account.
JO7 (45:24): The second part of that, though, is not just the pooled capital, but the pooled intellectual capital, as well as the network capital. So, the idea that, we're not just going to compete with these whales in the space, I guess with big bank accounts, with just our collective bank account, but we're also going to compete with them with our collective mind network, I guess. And that is something that we were able to, I guess test that pieces with the auction of the other BIT project, which is what we formed under... every DAO, I would say has an origin story. And a lot of them can point back to a specific project.
JO7 (46:04): But for our case, we were able to win four of the auctions, not only because we had the capital to do so, but because we had the army of minds doing wallet research, doing contract and transaction research. We had a war room that was figuring out what our auction strategy would be. And we had... that strategy was defined by votes from the DAO.
JO7 (46:29): So, we had a floor and a cap that we were willing to spend. And we knew every player that seemed to be interested in purchasing a part of this. So, it's just the notion that when you combine, you can be greater than the sum of its parts. So hopefully, I'm not sure if that explained it. Crisply enough, but hopefully that unpacked a little bit more of that.
Patrick Woods (46:53): Yeah, yeah. Super helpful. And just final tactical question, is this all happening in a Discord server? Or is this a telegram chat? You're saying you have a war room, where was the war room taking place?
JO7 (47:04): Yeah, I think you're correct, Discord was the organizing tool. I think it become the, if not one of the most important companion apps to DAOs, I would say it's not perfect. Because similar to any communications tool, like this one and to Slack, it's great for a synchronous, but oftentimes, it can be challenging, especially when you're a global collective like us, where there's folks in Asia, there's folks in Europe and in North America. Time can be a challenge.
JO7 (47:38): And when things are trying to move as fast as they do in the speed of crypto, conversations can get lost, and folks can sometimes be unable to chime in with their thoughts on a conversation. But to answer your question, it's technically happening through a Discord channel. And that Discord server is gated through the social tokens that we meant, and through the fundraising process. So yeah, let me know if there's anything else that I could unpack there, but the live auction was in voice room as well.
Patrick Woods (48:08): Cool. Yeah, it's starting to feel like it's coming full circle for me this conversation. So, I really appreciate you taking the time to spell this stuff out in a very tactical level too. I feel like you've touched on this. At the very end here, you're talking about a globally distributed community that's aligned around shared values and goals. It's just really fascinating. Final question, roughly, how many people are involved in the BitDAO?
JO7 (48:33): I believe our membership count is somewhere up around 50. And that will potentially expand. And I think another part, one of the things that's been interesting to me as a part of this experiment within DAOs is that... so I've always operated under the notion or the understanding that in any community, especially in the internet, you have participation inequality, right?
JO7 (48:57): So, some people call this the Pareto principle, or I'm more ascribed to the participation inequality idea that 1% are creators, 9% are intermittent contributors. And then, 90% are lurkers. And this is borne out, not only in the early days, Jakob Nielsen has produced some interesting pieces on this one in terms of research, but it's something that we saw at Yik Yak, which was a content-based platform. It's something that Facebook has also mentioned, Adam Mosseri back when he was just in UX at Facebook.
JO7 (49:28): I know has given some talks around the notion of, just a few folks creating most of the content. And I found that that... I don't know if the numbers bear out completely the same, because obviously, their sample sizes are different. But what I've seen is that... and this is an actual operational challenge for DAOs, which is that, if you get participation inequality that might work in other communities where, let's say, 10 people out of 50 contribute ideas, and then there's 30 out of 50 that end up in admittingly contributing, maybe providing feedback, thumbs up, hearts, memes, et cetera.
JO7 (50:05): But what happens when you need 25 of them every time to pass a vote and have quorum to be able to actually do something? So, that's like an actual operational challenge, I think for our DAO as well as some other DAOs when we literally can't spend money in our DAO, in our account without having it put to a vote. And that vote won't get passed on the blockchain unless it has a quorum. And so, that's I think something that's been interesting. And it's I think will continue to be a challenge. And why it's important to understand that?
JO7 (50:39): You're not just... that there are folks that it is decentralized, it is egalitarian. But at the same time, there are certain different roles that are needed within the DAO. And community management and engagement seem to be not just as important as other communities, but actually even more important within DAOs when you need participation to be able to... for the whole to actually even be able to do anything.
Patrick Woods (51:06): Wow. So, I know we're up on the hour-
Li Jin (51:08): I just want to make one quick point before we wrap it up, if that's okay.
Patrick Woods (51:12): Yeah, for sure.
Li Jin (51:12): I wanted to go back to JO7's question about, how does layering in financial incentives change the dynamics of the community online, which I think is one of the most frequent questions that I hear. And I just wanted to say like, I think it's unquestionable that it does change incentives for our community. Historically, communities have sprung up online without any shared financial incentive or potential for upside or potential for earnings.
Li Jin (51:43): And so, when you layer in this financial element, whether it be crypto or something else, I think that does skew people's behavior, and that introduces a money game that people then play. But the question that I would pose to everyone, is that necessarily a bad thing? Is it a bad thing that we're introducing this financial layer that changes people's incentives?
Li Jin (52:06): I don't think it's necessarily a bad thing. And I think it could potentially unlock a lot of communities and mission-oriented groups of people to go and execute on a specific goal that they have. That wasn't possible before in the purely altruistic state of the world. Just like how I imagined when the joint-stock corporation was first invented, people probably also raise questions of like, "Oh, does allowing external investors change the dynamics of this company?"
Li Jin (52:33): And we're going to have people who are invested, but not actually doing work for the company. And yeah, that's true, but look at the innovation that's unleashed and the amount of capital that has been provided to private companies. I think we're on the cusp of right now is potentially similar in terms of introducing a new business model for community online.
JO7 (52:54): And I'm just saying not having our financial incentive, it also has downsides.
Patrick Woods (53:02): So, everyone, I'm speechless here. This is a great conversation. I want to wrap it up. I know we're on the hour. Folks have some stuff to run to. But damn, JO7, thanks so much for coming up. Li, thanks for helping us to pull up the folks in the audience to help unpack these things. I've personally learned a lot.